Intellectual Property & Intangible Assets

Intellectual Property & Intangible Assets

Intellectual property and intangible asset valuations may be required for a number of reasons. For example, an allocation of purchase price may be required for financial reporting or tax purposes. Valuations of this type of property may also be required for litigation assignments dealing with, but not limited to, patent infringement, trademark violations, breaches of covenants not to compete, divorce, etc. Each of these assignments will be accomplished based on the applicable set of rules for the intended purpose.

Internal Revenue Code Section 1060 requires that when a business is acquired, a valuation must be performed to support the allocation of the total purchase price to the component parts for income tax purposes. The IRS pays close attention to these transactions to ensure that the purchase price allocation is reasonable and is treated consistently by both the purchaser and the seller. An inappropriate or inconsistent allocation can result in an increased tax liability and, in some instances, penalties.

Shilts CPA has experience in valuations of these types of assets for a variety of purposes, including: